When the “solution” is the problem

June 11, 2008

Chris Williams examines the causes of the global food crisis--and explains why the proposals offered by the world's wealthiest governments are motivated by self-interest.

WITH SOARING food prices sparking riots in dozens of countries and threatening to plunge 100 million more people into poverty, according to the New York Times, you might expect world leaders to take some kind of action.

Yet at the recent United Nations (UN) food summit in Rome, the priorities of world leaders were on display for all to see--and they didn't include alleviating the suffering of the billions around the globe, whose very existence is threatened by rising food prices.

UN Secretary General Ban Ki-moon stated that the world needs to "grow more food," and that governments placing restrictions on food exports and import tariffs in response to the protests of their starving populations must remove them.

But according to the UN's own figures, there is already enough food to feed everyone on the planet.

The Food and Agriculture Organization (FAO) of the UN reports that enough food was grown last year to give every single person on the planet 2,800 calories per day--enough to make them overweight. By 2030, with population growth continuing to decline as agricultural output rises, the UN predicts an estimated population of 8.3 billion people could receive 3,050 calories a day.

A young woman and her two young children in a refugee settlement in Bossaso, Puntland, Somalia
Soaring food prices threaten to plunge another 100 million people into poverty

Even Pope Benedict XVI--hardly a radical--was moved to say, "Hunger and malnutrition are unacceptable in a world which, in reality, has sufficient production levels, the resources and the know-how to put an end to these tragedies and their consequences."


ACCORDING TO Ban Ki-moon, however, the blame belongs, at least in part, with poor countries that have instituted measures designed to cushion their populations from the impact of rising prices. "Some countries have taken action by limiting exports or by imposing price controls," Ban said. "They only distort markets and force prices even higher."

This kind of "advice" is precisely what caused the food crisis in the first place.

Haiti, one of the countries hardest hit by the food crisis, used to grow its own rice, and Haitian farmers were protected by high tariff barriers. All that ended in 1986, when the International Monetary Fund (IMF), as a condition for more loans to pay off previous debt, forced Haiti to remove trade barriers.

Within two years, domestic rice growing was decimated by cheap U.S. imports, leaving Haiti open to the vagaries of the world market and unable to feed its own population when prices shot through the roof.

What else to read

The International Socialist Review has a special feature on the global food crisis, including Sharon Smith's "The revolt over rising food prices," an eyewitness report on "Haiti's food riots" by Mark Schuller and Hossam El-Hamalawy's "Revolt at Mahalla" on the eruption of class struggle in Egypt in connection with the food crisis.

For updated statistics on world hunger, visit the United Nations' Food and Agriculture Organization Web site. The FAO's report "State of Food Insecurity in the World" is available online. The Food First Web site also has useful articles and analyses.

World Hunger: Twelve Myths by Frances Moore Lappe, Joseph Collins, Peter Rosset and Luis Esparza is an authoritative examination of the policies and politics that cause hunger, as well as the misconceptions about "humanitarian" aid from advanced countries.

How can U.S. companies afford to sell rice so cheaply that they can undercut competition in a country where 80 percent of the population lives on less than $2 a day? U.S. agribusiness is subsidized to such an extent that it can sell rice at up to 20 percent below production cost--the very kind of support that Haitian farmers were barred from receiving.

The U.S. was at least criticized at the food summit for these extensive farming subsidies, which amount to massive corporate welfare handouts. Of the $165 billion in federal subsidies going to farmers from 1995-2005, more than 80 percent went to the largest 20 percent of growers. In the same period, members of Congress and their relatives raked in $9.2 million in farm subsidies, according to USA Today.

The U.S. also caught flak for its role in promoting biofuels for its corn-to-Hummer-fuel program. One-third of the U.S. corn crop this year will be turned into the alternative fuel ethanol, another factor that is driving up food prices. Much of the rest of corn will be used to feed animals--an unnatural and highly inefficient use in itself, but the animals grow faster and therefore are more profitable.

But the response of the Bush administration to the criticism was basically to tell the rest of the world to get lost. U.S. Agriculture Secretary Ed Schafer bristled at the criticism: "I don't think the United States gets enough credit at all for providing over one half of all the food aid."

The disagreements between different countries representing their own corporate interests meant that a comprehensive and meaningful solution to the food crisis--or even a coherent statement--was beyond the summit.

Proposals in Rome included implementing a "new Green Revolution" for Africa (translation: Africans are starving because they don't know how to grow things and need Western technology, irrigation techniques and genetically modified seeds) and reducing "barriers to trade" (translation: give us total access to all your markets and land).

Delegates from the 183 countries represented at the summit were supposed to issue a resounding declaration on "eliminating hunger and securing food for all." However, because of all the squabbling over subsidies, export controls and the role of increased biofuel production, the statement had to be watered down to almost complete meaninglessness.


THE ESCALATION in human misery as a result of rising food prices is fabulous news for some, however. The giant agribusinesses are quite literally profiting from the increase in starving people.

As Britain's Independent pointed out,

Some of the world's richest food companies are making record profits. Monsanto last month reported that its net income for the three months up to the end of February this year had more than doubled over the same period in 2007, from $543 million to $1.12 billion. Its profits increased from $1.44 billion to $2.22 billion.

Cargill's net earnings soared by 86 per cent from $553 million to $1.03 billion over the same three months. And Archer Daniels Midland, one of the world's largest agricultural processors of soy, corn and wheat, increased its net earnings by 42 percent in the first three months of this year from $363 million to $517 million. The operating profit of its grains merchandising and handling operations jumped 16-fold from $21 million to $341 million.

Because of the rising prices, speculative trading in agricultural commodities has grown by more than 1,000 percent in the past four years, to more than $150 billion, and this, in turn, is pushing prices up.

The food crisis, therefore, doesn't really have anything to do with "things," but with relationships. Specifically, world hunger is about relationships among different sets of people--those who own and control the global economy in food and those who don't.

In the so-called "free market," it doesn't matter that people think food should be a human right, or that humans can't survive without it. Food is a commodity, the same as any other commodity--clothes, cars, pencils, books, etc. People aren't seen as having a right to purchase any particular commodity, and there is no distinction between necessities and luxuries.

Those who are rich can purchase anything they want, while those who are poor may not have enough to buy even the most basic foodstuffs.

Economists call this a lack of "effective demand." In other words, there is certainly intense demand among the poor for food, but because they don't have the money, that "demand" isn't "effective," in the sense that the market will provide for them.

As Jeffrey Sachs, director of the Earth Institute at Columbia University, told the New York Times last year, market liberalization and trade deregulation are "based on the idea that if you take away the government for the poorest of the poor, that somehow markets will solve the problems...But markets can't step in and won't step in when people have nothing. And if you take away help, you leave them to die."

If governments try to facilitate feeding the poor by instituting price controls or subsidizing the products, rather than the corporations that manufacture them, they are accused of creating "distortions" in the market and "disturbing" the free flow of goods.

This is why simply growing more food isn't the solution to the food crisis. It's not food that the world lacks. What the majority of the population of the world lacks--despite being the ones who actually grow all the food and manufacture all the goods--is the power to control how that food and those goods are distributed.

Ban Ki-moon's declaration that $20 billion a year is required to eradicate world hunger sounds like a lot of money--until you stack it up against the $35 billion allocated to crop subsidies in the recent U.S. farm bill or the $13 billion going to the oil and gas corporations, along with $25 billion to a resurgent nuclear industry, in the recent energy bill. That $20 billion to fight world hunger is less than the Christmas bonuses paid to Wall Street executives last year, and less than 2 percent of the U.S. defense budget.

And such are the priorities of the system that far less than $20 billion was pledged in aid at the food summit.


THE FOOD crisis is also directly connected to other aspects of the operation of the system--particularly, the conflicts over resources that play out around the globe.

Africa has increasingly been plunged into a rerun of the 18th century "scramble for Africa" over its extensive (and, from a corporate perspective, underutilized) natural resources. Oil and other industrially important minerals (uranium and copper, for example) abound, and new competitors are throwing their hats into the ring--China and India, in particular.

Western governments talk about China's involvement in Darfur, but their motivations in this case are not that they care about the impoverished and brutalized people of Darfur, but that China is the single biggest investor in Sudan's developing oil fields--which, according to the West, are supposed to be reserved for exclusive exploitation by Western corporations.

Oil companies are scouring the planet in search of new supplies of oil and other raw materials. As these become harder and more expensive to find, business interests need increasing military and diplomatic arm-twisting, bullying and bribing to get access--especially because they are being out-competed in some areas they regard as their own by a very flush China and a newly reinvigorated, loaded and, hence, aggressive Russia.

In addition, it is estimated that for every calorie of food produced, it requires the consumption of 10 calories of oil. Hence, the strong correlation between rocketing oil prices and increases in the cost of food.

All of these factors--food prices, oil, imperialism--are fundamentally connected to the underlying insanity of the capitalist mode of production.

Africa does need technical know-how and advanced irrigation techniques. But if these are provided by the same corporate vultures and paid for with the same type of "loans" and "development aid" that the UN has in mind, all we have to look forward to is another UN conference in five years urging the "world community of nations" to once again "do better" and "really focus" on poverty reduction and food provision.

As the Independent commented:

A sane world would at this point reverse course and do some of the worthy things that UN summits are so good at talking about--helping some of the 96 percent of African farms dependent on rainfall to build irrigation systems, for example.

But the business-driven priority, as endorsed by the FAO summit, is to gouge open the world's economies even faster, via a speedy conclusion of the Doha round of trade liberalization. That is likely to make it even harder for the poor to feed themselves.

Fortunately, the thousands of protesters at the Rome summit (as well as the rioters in poor countries whose actions have spurred many governments to institute price and export controls) point in a different direction.

What is required now is the rebirth of a global justice movement that brings together all these various protests and asserts that food is a fundamental human right--a movement that recognizes capitalism has created the problem of world hunger and is incapable of being part of the solution.

We need a democratic movement that organizes to roll back the priorities of a system that denies people food in order to guarantee profits.

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